Why We Built?

DeFi applications can be broadly categorized into three layers:

1. Base layer: The underlying blockchain network that DeFi applications are built on;

2. Protocol layer: The layer of decentralized protocols that provide the building blocks for DeFi applications;

3. Application layer: The layer of user-facing DeFi applications built on top of the base and protocol layers.

But the order has been changed in the new stage of Defi 2.0, it goes:

Application Layer > Base Layer > Protocol Layer. As visualized in the figure below:

How to objectively evaluate the pros and cons and potential of a Defi protocol?

When assessing a DeFi protocol's potential, it is vital to consider factors beyond Total Value Locked (TVL) and growth rate. While these metrics are significant indicators of a protocol's value, they do not necessarily equate to success in the long run.

As the market evolves, successful DeFi protocols must integrate with the application layer, as metrics such as traffic and usage rate become increasingly important. To achieve excellence, a DeFi protocol must prioritize high TVL and velocity, coupled with strong flow and rate metrics.

At the end of the day, an exceptional DeFi protocol is one that delivers results for its users and adds value to the ecosystem.